Update | Why Solar Manufacturer Chose Phoenix: Public Policy

Suntech, the world’s second largest producer of solar cells has announced its plan to build its first solar manufacturing plant in the United States, in the Phoenix, Arizona. With headquarters in Wuxi, China, Suntech will be the first major Chinese solar company to build a major manufacturing plant in the United States.

“Bringing manufacturing jobs to the U.S. is part of Suntech’s vision to grow the solar market in every corner of the world,” said Suntech’s Chairman and CEO Dr. Zhengrong Shi, in a press release. “We are eagerly watching growing markets and see the potential of bringing manufacturing capabilities to other markets where we see the combination of rapid local market growth and manufacturing cost competitiveness.”

Photo by First Solar

The number one producer of solar panels is First Solar, with headquarters in the Phoenix metro-area (Tempe).

Ironically, First Solar announced plans in September to build the world’s largest solar power plant — in China. First Solar’s growth resulted in the company being added to the Standard & Poor 500 stock index last month.

*Arizona’s success in bringing Suntech to the state is in part due to enactment this year of a the Renewable Energy Tax Incentive Program sponsored in the Arizona Senate by Barbara Leff (R). (For more on the bill, see here).

In fact, Arizona Governor Jan Brewer and representatives from the Greater Phoenix Economic Council (a strong backer of the bill) held a press conference this morning to discuss Suntech’s announcement.

A story in today’s NYT quotes Suntech’s Roger Efird as underscoring the importance of state incentives in this competition for solar manufacturers:

“Fifteen states, according to Mr. Efird, were initially considered as possible sites. But, he said, ‘we had it down to Texas versus Arizona in the final decision.’ Texas recently contemplated strong incentives for solar power, but its legislature never passed them.”

The Texas legislature originally had so many renewable power bills lined up that it had dubbed (prematurely, as it turned out) 2009 “The Solar Session.”

Prospects for Arizona passing meaningful solar bills in 2009 also looked bleak as the state’s economy went into a free fall. But a stepped-up lobbying campaign by Senator Leff, the GPEC and others, resulted in passage of some (not all) key components of the state’s own “solar session.”